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Development in Detroit picked up in 2022 after a couple tough years. What will this year bring?
The fundamentals don’t appear promising: Construction costs are still high, though down from historic levels. Downtown office buildings have high vacancy rates.
And yet the city continues to see big projects announced. We’re likely to see major changes continue downtown, along the riverfront and in neighborhoods with high property values like Corktown and Eastern Market. On the neighborhood level, infrastructure upgrades and a steady housing market have resulted in a steady trickle of business growth along corridors.
Here’s what we’re watching in 2023: developments that require big tax breaks to move forward, affordable housing projects, the progress of greenways, and changes to historic neighborhoods and buildings.
District Detroit plans come before residents
Plans for the so-called District Detroit have been in the works for years. The billionaire Ilitch family, which built the taxpayer-funded Little Caesars Arena, have floated the idea of a vibrant district around the arena featuring apartments, hotels, retail and office space since at least 2014. Only a handful of those improvements have been realized, and the area largely remains empty lots and buildings.
But now the family has teamed up with Stephen Ross, a fellow billionaire, prolific real estate investor and former Detroiter. Ross promised to spend $100 million of his own money on several projects with the Ilitch family, including a University of Michigan satellite campus. The first phase of the new District Detroit plan calls for the redevelopment and construction of 10 buildings at a cost of $1.5 billion.
This is easily the most complicated, impactful and expensive development in Detroit at the moment. Ross and the Illitches have already gotten a $100 million earmark from state legislators for the U-M building and plan on asking for tens of millions of more dollars in tax breaks from the city and state. Because of the price tag the developers will have to sign a community benefits agreement with a council of local residents, who asked some tough questions at a kickoff meeting about the Ilitches’ lack of earlier progress. Stay tuned to this one.
Joe Louis Greenway gets longer
This transformational greenway was on my list of developments to watch two years ago. It’s still worth paying attention to.
Steady progress has been made on the 27.5-mile loop around the city and through Hamtramck, Highland Park and Dearborn for pedestrians and cyclists. In October construction finished on the first new stretch of the greenway, a one-mile section from Joy Road to Warren Avenue on the west side.
This year an extension of the Dequindre Cut and along Hamtramck Drive are planned, but the project still has a long way to go, including securing the last right-of-ways from property owners and raising a whole lot more money. The total cost of the project is projected to be $240 million, of which the city has raised $114 million.
Eastern Market changes in the works
Many worried that when developer Sanford Nelson scooped up dozens of properties in Eastern Market that the neighborhood would drastically change. But aside from the closure of some longtime businesses and a few openings over the past couple years, the essential character of the market has remained fairly consistent.
Bigger shifts are likely to come in 2023. Eastern Market has long sought zoning changes to create a district that focuses on food production and prohibits industry. That rezoning became official in September last year, cementing the area as a hub for food production, distribution and consumption for years to come.
A slew of other development projects for the area are also in the works, including a new 25,000-square-foot food hall, expansion of corned beef-maker EW Grobbel’s operations and renovation of a historic cold storage building into 55,000 square feet of office space, though it’s not yet known who the occupants will be.
RiverWalk nears completion
Detroit is very close to a fully realized riverfront promenade, with 2023 being a pivotal year for that goal.
Construction should finish this year on the last unconnected stretch of the east RiverWalk from downtown to Belle Isle, which requires redevelopment of the former Uniroyal site.
Major progress is also happening on the west RiverWalk. Ground broke last year on the $75 million project to transform 22 acres west of downtown into the Ralph C. Wilson Jr. Centennial Park with a playground, water garden and sports pavilion. The Ralph C. Wilson Jr. Foundation pitched in $40 million for the park, which is expected to open in 2024. And let’s not forget about the Southwest Greenway, which will open this year and connect Michigan Central Station to the riverwalk along a defunct railway.
One sticking point? To connect the riverfront from the MacArthur Bridge to Riverside Park in Southwest Detroit, there needs to be some decisions made about a controversial cement facility owned by the billionaire Moroun family and which sits between Centennial Park and Riverside, in the shadow of the Ambassador Bridge. The city has issued a series of temporary permits for the facility, but residents oppose it saying it creates pollution near parks. They want the city to acquire the facility in order to realize the “bridge-to-bridge” riverfront, but the Morouns are requesting land further west where they can build a new cement factory.
Affordable housing stock grows
The City of Detroit laid out a plan to spend $203 million on affordable housing projects and programs. Most of the money would come from the city’s ARPA funds and would include down payment assistance for low-income homebuyers and home repair grants for landlords.
The bulk of the money, however, will be spent on developing or renovating multifamily buildings. The city hopes to create 1,600 affordable units across 30 projects. The Detroit Housing Commission is planning on spending $20 million to rehab apartment buildings for renters making less than 30% of the area median income (under $27,000 for a family of four).
The initiative could make a decent dent in the affordable housing shortfall if all this spending goes as planned. We want to see how effective the city programs are at helping people find and stay in affordable homes, as well as if the Detroit Housing Commission can successfully manage more multifamily buildings.
Clement Kern Gardens relocation experiment to start
A fascinating, but high-stakes experiment in upzoning will get underway this year at a low-income community in Corktown.
American Community Developers Inc. will demolish the 87 townhomes at Clement Kern Gardens, possibly beginning this year, and steadily build new structures in their place. The project will eventually total 350 units at a cost of $80 million. All current residents have been told they will be relocated by the city to new homes during construction with rents based on their incomes. They will later have the option to move back into the redeveloped Clement Kern or another home in Corktown.
Relocation is starting this year and construction should begin soon after. The first of the new units won’t be ready until 2025.
Cooley High redevelopment falters
Cooley High School has been vacant and deteriorating since it closed in 2010. It seemed like 2022 might be the year the iconic school would finally be on a path towards redevelopment. But now it’s not so clear.
Local nonprofit Life Remodeled nearly closed on a deal to buy the building from the Detroit Public Schools Community District for $400,000. Their plan was to redevelop it into a community hub for nonprofits and entrepreneurs. But the school board and superintendent put the sale on hold, saying they thought the building is worth more.
Cooley is one of 63 vacant schools owned by the district without a clear path towards redevelopment.
Rehab to begin at long-abandoned Fisher Body Plant
If everything goes as planned, construction could start on one of the more unlikely redevelopments in Detroit in recent history this year.
A Black-led development team announced last year that it plans to redevelop the long-abandoned Fisher Body Plant No. 21 into 433 apartments at a cost of $134 million. They also plan to include 28,000 square feet of commercial and retail space and 15,000 square feet of coworking space. Deterioration of the building has been severe since it was abandoned in 1993.
The developers finalized a community development agreement last June that requires the developers to contribute $500,000 to a community fund and adhere to certain environmental safeguards during construction.
Reach AARON MONDRY at aaron@outliermedia.org or 313-403-7221. This article appears in today’s issue of The Dig, Outlier Media’s weekly newsletter on housing and real estate. Sign up for The Dig.